One of the most valuable ways your child can learn about money is by earning it themselves. If your kids are of age and want to buy their own things, then it might be time for them to get a job.
The minimum age for employment is 14 years old, although that can vary by city and state laws. Here’s how to prepare your teen for their first job.
- You can show your teen how to get a good job long before they start looking for one by showing them jobs that align with their skills and interests.
- Talk to them about budgeting by showing them your household budget and how to build one of their own.
- Discuss minimum wage and taxes. This helps them set expectations on earnings and expenses.
Before Your Teen Starts the Job-Hunting Process
As your teen starts showing an interest in earning income so they can buy their own things, you might want to start some pre-job preparations.
Show Them Your Budget
Your budget for the family can be a great teaching tool for your teen. Show them how much money comes in each month and your expenses, including the following categories and anything else you’d like to share with them:
- Rent or mortgage payment
- Car payment and insurance
- Phone bill
- Extracurricular activities
If your kids want to go to the movies every weekend with their friends, show them how much that will cost per month and discuss which line-item it would come from in your budget. If you don’t have any wiggle room to pay for their entertainment, they might be even more driven to get a job on their own to afford their own wants.
Ask Them About Their Goals
Teens have different goals. Some want to hang out with friends while others want to buy a car. Some want to save for college and others might want to help their family cover expenses.
Sometimes teens don’t know they want a job until you ask them what they want. For instance, if your kid wants a car and you don’t have the cash to afford it, you can work out a plan for them to buy one on their own.
See If They’re Eligible and Set Working Limits
Their first job might be limited based on age. Some companies don’t hire 14-year-olds while others don’t hire anyone under the age of 18. If your teen is eager to work but isn’t legally eligible, they might have to find jobs that fit those circumstances. Sometimes that’s working odd jobs around the neighborhood, like babysitting or mowing lawns.
If they are legally allowed to work, talk about how a job will impact their schooling and home responsibilities. Ask them questions like:
- Do you plan to work after school, on the weekends, or only during summer break?
- Do you have a set number of hours you need to work? (The Fair Labor Standards Act limits the number of hours for minors under 16 years of age).
- Will you have a job that is flexible with your classes, testing, extracurricular activities, and anything else related to school?
- How much do you need to earn to reach your goals without jeopardizing your studies?
Your questions will vary based on your teen’s individual circumstances, but make sure to ask questions long before they get a job so they can set reasonable expectations.
What Teens Can Expect To Earn
The minimum wage varies by state and sometimes by jurisdiction, but the federal minimum wage is currently $7.25 an hour. According to ZipRecruiter, teens earn an average of $16.74 an hour.
Explain to your teen that people who have 20 years of work experience tend to earn more than those who don’t have any. What your teen earns can vary widely by experience, skills, job, and location.
Remember that some jobs are more flexible than others, so if you want your teen to work around their school schedule—nights and weekends—think of jobs that are open during those hours, like:
- Restaurant hosts
- Grocery store workers
- Car wash attendants
- Retail worker
- Dog walker
- Web designer
- Freelance writer
Use your teen’s skills and interests to help them decide on a job that’s a good fit for them.
Prep Your Teen for the Costs That Come With a Job
Amid the excitement of getting a new job, your teenager may forget that there are costs that come with having a job.
If your child isn’t working from home, they’ll need to get to and from their new job. Ask them things like:
- Is the job close enough for you to walk?
- Are you planning on getting a car to take you if you can’t walk?
- If you don’t have enough money for a car just yet, can you arrange transportation, whether it’s through a Lyft, public transportation, a friend, or a parent?
- Will you cover the cost of gas if you have to ask others for a ride?
If your child is working from home, what tools do they need to do their job? For instance, do they need a computer, reliable internet, and a dedicated workspace?
Whenever you work for a company that has a dress code, there’s a chance you’ll need to pay for a uniform. That includes:
- Appropriate shoes
- Accessories (like a vest or name tag)
And anything else the company deems necessary. If your child doesn’t have any money yet, ask them how they’ll pay for these upfront costs. If a parent is paying for it, do they have a plan in place to pay them back?
Paying for Meals
If your teen is working an eight-hour weekend shift, they may get a couple of breaks, including one for lunch, depending on which state they work in. How are they going to pay for meals and snacks? Are they going to pack something to eat during breaks or are they going to buy something? Preparing them now can save them from making impulsive—and expensive—purchases later.
Age doesn’t matter when it comes to taxes—only income. If your teen completed a W-4 with their employer, they’ll send a W-2 at the beginning of the year for your teen to file taxes. The income to meet the standard deduction threshold in 2021 was $12,950.
If your teen worked for themselves—babysitting or web designing, for example—they’re considered self-employed. If they earned at least $400 last year, they’ll need to file taxes.
How much money your teen takes home varies by how much they earn and their W-4 withholdings (if they have a W-2 job).
Your Teen Has a Job and a Paycheck, Now What?
Once your teen gets a job and starts earning money, it’s a good idea to show them how to manage it well.
Create a Budget
Since you’ve already shown them your household budget, help them create a budget of their own. They might start paying for things like:
- School supplies
- Phone bill
- Car payment and insurance
- Entertainment (music subscriptions, streaming services)
- Dining out
Every budget is different based on the person’s income, expenses, and needs. But doing this now can help them when they go to college and beyond.
In your teen’s budget, you should have a line item for savings. Even if it’s small, like $20 a month, they should try to stash away a little bit whenever they can.
While investing might not seem like something a teen needs to worry about, it’s never too early to introduce it.
Your teen might want to use some of their extra cash to invest for short- and long-term goals, like paying for college, buying a home, or even saving for retirement. Teach your teen about the stock market and responsible investing as a way to make their money work for them. By explaining risk and the different types of investments opportunities (stocks, ETFs, mutual funds, bonds, etc.), you can help them see that having money gives them a chance to make that money work for them.
The Bottom Line
Your teen might tell you they’re ready to earn some cash, but it’s up to you to help them navigate the world of labor. Show them how to find a job that’s best for them and create a budget to manage their money. Talk to them about what they can expect to earn in their position and how it’s OK to ask for raises. Navigate every aspect of job-hunting and being a responsible employee. The more you show them, the more likely they are to become a successful employee.